No salary increase for Royal Mail boss - at her request - sidestepping potential clash with the government

Blue chip postal delivery firm Royal Mail has announced that it will not increase the salary of chief executive Moya Greene - at her own request – a move which appears to sidestep a potential clash with the Government.

It comes after it was reported earlier today that ministers were on a collision course with the company after chairman Donald Brydon wanted to improve Ms Greene's pay after she steered Royal Mail through the stock market flotation.

The government still holds a 30 per cent chunk of the group after it was controversially privatised last year.

Clash avoided: A potential hike in Moya Greene's pay was seen as threatening to clash with Business Secretary Vince Cable's call for boardroom restraint.

In a statement, the company said: ‘The remuneration committee of Royal Mail group has decided not to propose any base pay increase or new incentive arrangements for the chief executive officer. ‘In doing so, the committee has taken into account the views and wishes of the CEO.’

Ms Greene's total pay package for the year to March 2013 was £1.22million. This does not include a controversial £250,000 perk to help her buy a house, which she repaid.

A potential hike in her pay for the current year was seen as threatening to clash with Business Secretary Vince Cable.

Last month he wrote to the chairs of the
remuneration committees of each of the top 100 companies listed on the
London Stock Exchange urging pay restraint.

Business Secretary Vince Cable said: ‘I admire the restraint the Royal Mail board has shown today. I appreciate the continuing good work of Moya Greene, their CEO, in transforming the business.’

It is the latest controversy to hit the group amid accusations that last autumn's stock market float saw it sold off on the cheap.

Pay freeze: Ms Greene's total pay package for the year to March 2013 was £1.22million, up from £1.1million in the previous year.

The company was initially valued at £3.3billion by the public offering pitched at 330p a share but it immediately rocketed 38 per cent higher on their conditional stock market debut on October 11 to close the day at 455p, before going on to more than double by early December when the stock’s stellar performance propelled the firm into the FTSE 100 index of top UK shares.

The stock touched an intra-day trading peak of 618p and a closing high of 615p on January 15 before drifting back into the 500p range later that month.

Royal Mail shares were trading today at 542.6p, up 4.1p in mid afternoon trade.

A National Audit Office report, published on April 1, concluded that the privatisation of Royal Mail short-changed the taxpayer by £1billion.

The damning report on the flotation revealed that 16 priority institutional investors were allocated £728million worth of Royal Mail shares, while another 94 institutions were given £570million worth.

The news angered retail investors who were limited to share allocations worth less than £750 each.

Limits were imposed on the number of shares small investors could buy after it emerged the shares listing was over-subscribed by some 24 times the expected level.

Critics said the level of interest showed that Royal Mail was significantly undervalued within the IPO’s share price range of 260p to 330p, even at the top of the that range.

Almost a month before the shares listing analysts at stockbrokers Panmure Gordon were warning the company was undervalued by as much as £1billion.

Business Secretary Vince Cable had dismissed the rocketing share price – at one stage Royal Mail shares were 75 per cent higher than their offer price – as ‘froth.’

Last week, MPs were told that the asset management arm of Lazard, independent adviser on the sale, made an £8million profit selling shares in the first week of trading following privatisation.

The bank said there was a ‘Chinese wall’ over the advice.

Royal Mail shares stock have been in retreat since the start of April with some traders citing concerns over the expiry of the government's lock-up of its remaining 30 per cent stake.

Traders have said any further shares sale by the UK authorities before the group’s full year results due on May 22 would not be taken well.